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On Trenev street, a short drive from the centre of Donetsk, crowds gathered Tuesday around a nine-storey block of flats holed by two shells as the war in eastern Ukraine reached into the heart of its largest city.

The attack had clearly gutted several flats, blasting out balconies on two floors, and scattering debris and broken glass over the ground outside: a nearby garage was also destroyed.

Witnesses said that the cannonade was launched from Ukrainian positions on the outskirts of Donetsk and that their target appeared to be a nearby military base occupied by pro-Russian rebels.

“It felt like an earthquake,” says Lyubov Vasilievna, a 76-year-old who lives on the second floor.

It was not the only such incident. Local authorities say rocket attacks across the region on Tuesday left 22 people dead.

The human cost of the war in eastern Ukraine was highlighted in spectacular fashion this month when Malaysia Airlines Flight MH17 was downed over rebel-held territory, with the loss of all 298 on board.

But that disaster has tended to overshadow the rising death toll among eastern Ukraine’s civilian population. The UN says that since mid-April, when Kiev launched its “anti-terror operation”, 1,129 civilians have been killed and 3,442 injured in Ukraine.

And with the conflict approaching an important inflection point, casualties are almost certain to increase. Ukrainian forces have scored big successes in recent days, seizing territory and pushing the rebels on to the back foot. According to the US, Russia has responded by stepping up its cross-border flow of heavy weapons and other assistance to the separatists. Experts think it may even send in its own troops if it feels the rebels are about to lose.

Meanwhile, as Ukrainian troops close in on Donetsk, one of the last remaining rebel strongholds, thousands are being caught in the crossfire. People living close to the front line are seeing their lives turned upside down by a conflict few of them even understand.

Many are sandwiched between Ukrainian government forces to the north and west of Donetsk and a determined insurgent army, firmly entrenched in residential areas, that has vowed to make a last stand in the city – whatever the cost in civilian lives.

Each death stokes more anger, which could imperil any postwar reconciliation.

“We can’t live with them [the Ukrainians]. This is a fascist regime,” says Sergei Buleiko, a 54-year-old engineer, who lives in the house on Trenev Street.

The intensifying rocket attacks are coming in for heavy criticism. Human Rights Watch, the advocacy group, claims a series of “Grad” rocket strikes on Donetsk and its environs by Ukrainian troops and pro-Kiev militias between July 12 and 21 left at least 16 people dead and many wounded.

Kiev has blamed the attacks on the rebels. “Russian-backed terrorists have deliberately used artillery against residential areas in an attempt to discredit the Ukrainian army,” says Oleksandr Danylyuk, an adviser to the Ukrainian defence minister. “The whole point of the anti-terror operation is to liberate thecities of eastern Ukraine, not destroy them.”

Whoever is to blame, the artillery strikes are just one of the hazards facing the people of Donetsk. For three months they have also had to endure the perils of rule by separatist rebels. Dozens of them have been abducted at gunpoint, detained and sometimes tortured. With no police around, looting, burglaries and rape are common.

“Impunity in the areas under the control of the armed groups in the east has led to the collapse of the rule of law,” the UN said in a report. In Slavyansk, which was the insurgents’ main redoubt until they fled the city in early July, police last week excavated a mass grave holding 14 bodies that they say were summarily executed by the rebels. Sick of the war, locals in Donetsk are beginning to speak out against the city’s rulers.

At a public meeting this month, a pensioner accused Pavel Gubarev, one of the separatist leaders, of endangering people’s lives by firing on Ukrainian positions from the roofs of apartment buildings.

“Go away, free this city of a million people,” the woman said. “Don’t make us your hostages.”

Under pressure from the insurgents and the Ukrainian army, the people of Donetsk are voting with their feet. Tens of thousands have fled the city – some of the 230,000 people the UN says have been displaced by the conflict. Donetsk is now a ghost town, its shops closed, its businesses boarded up. Parks that once were full of young couples and strolling pensioners stand empty. By day, packs of feral dogs roam its denuded streets and, by night, the distant boom of shelling and rattle of small arms fire shake the summer calm.

The situation is far worse in the nearby town of Lugansk, the other main rebel stronghold, which became the main target of Ukraine’s advance after the fall of Slavyansk. Parts of the city have come under heavy artillery bombardment in recent days, leading to significant civilian casualties. Local authorities say 93 people have died since the beginning of July, while 97 apartment blocks and 286 private houses have been destroyed.

Karina Bondarenko, a Lugansk resident who fled the city last week, says people have been sheltering in their cellars for days on end. Leaving has become increasingly difficult: the railway station is closed, taxis are not running and the rebels have banned private cars from the roads. “People are trapped,” she says.

Ms Bondarenko says the rebels have deliberately destroyed infrastructure, such as district heating systems and electricity cables. But others blame Ukrainian forces for the damage. Elena, a nurse in Slavyansk, says she worries about her parents who are still stuck in the Lugansk region. They have no money: pensions are not being paid and the postal system has broken down.

Every oligarch has formed his own army to carry out punitive operations against the people

Vasily Kolosov, miner

“There are people suffering there who have nothing to do with this conflict,” she says. “We don’t know who’s firing, but the fact is, people are dying.”

The Ukrainian advance has intensified lingering popular fears of the new regime in Kiev – fears that have been stirred up by anti-Ukrainian propaganda on Russian television channels, widely watched in Donetsk.

Near the October coal mine, locals cleaned up the debris after an artillery attack last week gutted a flower shop, a kebab stand and a bus stop. Witnesses said the damage was caused by Grad missiles fired from Donetsk airport, which is controlled by government troops.

Pointing to the shattered glass still strewn across the pavement, miner Vasily Kolosov said panic is spreading as Ukraine tightens the noose. He said he was not scared of government troops but of the private militias, created and financed by tycoons such as Ihor Kolomoisky, that fought alongside them.

“At the moment, every oligarch has formed his own army to carry out punitive operations against the people,” says Mr Kolosov, who was forced to leave his home in Peski, a nearby suburb, after it was shelled and is now living with a friend near the train station. Photos of Peski on his mobile phone show huge craters from mortar fire and Grad missiles, and blocks of flats damaged by shell fire.

An armed pro-Russian separatist stands guard at a railway station in Donetsk

Part of the problem is that both sides have been using heavy artillery and missile systems, which they are firing from a distance – a practice that almost inevitably leads to civilian casualties. Human Rights Watch has particularly singled out the use of Grad, an unguided rocket that cannot be targeted accurately and is often fired in salvos to saturate a wide area. It says its use in heavily populated areas violates the laws of war and may amount to a war crime. Kiev makes the point that most of the Grad systems have been deployed by the rebels and are supplied by Russia.

Amid the mutual finger pointing, HRW is continuing to insist that the lethal attacks between July 12 and 21 were caused by Ukrainian Grad, despite Kiev’s denials. “From studying the craters it was clear the rockets were fired from areas controlled by government forces,” says Ole Solvang, an HRW researcher.

The October mine, Mr Kolosov’s workplace, was forced to shut down on July 10 after artillery fire knocked out its electricity supply. With its water pumps out of action, it flooded. At a stroke, dozens of workers lost their livelihoods.

One morning last week the mine’s train depot was still smouldering after taking a direct hit, its railway lines were mangled by a crater and the main shaft where coal is brought to the surface had been holed by a shell. Mr Kolosov said the damage was so extensive that he did not expect the mine to reopen after the war.

In Donetsk, the final battle is still to come. But in other parts of eastern Ukraine, forces loyal to Kiev are back in control and people are drifting back to their homes.

From studying the craters it was clear the rockets were fired from areas controlled by government forces

Ole Solvang, a Human Rights Watch researcher

Some have had a nasty shock. Semyonovka, a small settlement on the fringes of Slavyansk, was heavily shelled during the fighting, many of its residential buildings reduced to ruins. A smashed-up petrol station stands near the burnt-out carcass of a bus: across the road are blocks of flats with huge holes ripped out of them and their roofs blown off.

Last week, Tamara Zolotushenko, a pensioner, arrived in Semyonovka with her family to gather belongings from the flat she had lived in for 42 years. Having fled at the end of May, when the fighting in Donbass suddenly intensified, she moved to her daughter’s house in a nearby village. That too was bombed. She says she would sit on her bed during the shelling, gripping the religious icons she brought from home.

Her Semyonovka home is a mess. The roof has been destroyed, and wallpaper now hangs off in big swaths. There is a gaping hole in one side of the building. The whole block will have to be demolished, she said.

A notice to residents in her hallway from the local energy company says that due to the destruction of the neighbourhood’s boiler, “we will not be able to heat your house this winter. We suggest you secure an alternative source of heat.”

Ms Zolotushenko jokes about putting a wood-burning stove in the flat, like the ones people used during the civil war nearly 100 years ago.

She says she hopes to relocate to her brother’s village, at least for the winter, but is scared to think what will happen after that.

“I’m just not sure we’ll get a new flat,” she says. “It looks like we’ll be dragging our things around for some time to come.”

A greenhouse business shattered by conflict

Dmitry Kolesnikov built up a thriving business – and is now watching it disintegrate, piece by piece.

The 30-something entrepreneur grows tomatoes in greenhouses he built in a Donetsk suburb. In the good times his produce was sold across Ukraine.

But his company, ironically called Mir, or “Peace”, has become a casualty of the war. Last week its greenhouses were shelled by Ukrainian government troops engaging with rebel forces in Donetsk.

It is a sobering moment for Mr Kolesnikov. “We built that company in the middle of an empty field, from scratch, and it now employs 70 people,” he says. But for now, “I’m just waiting on the sidelines for it all to stop”.

The shelling was the coup de grâce at the end of a painful decline. The bad times began earlier this year, when political convulsions in Kiev made it difficult for businessmen such as Mr Kolesnikov to obtain bank loans. It grew worse as the Maidan revolution triggered tensions between eastern and western Ukraine.

Mir purchases its plastic packaging from a supplier in the west of the country. But as rumours spread that separatists in the east were stopping lorries with western number plates and setting fire to them, they stopped coming.

With pro-Russian separatists taking up arms against Ukrainian troops, some markets in the east of the country such as Lugansk became no-go areas. Mr Kolesnikov wanted to send his tomatoes to Russia but the “People’s Republic of Donetsk”, the rebel government, banned the export of foodstuffs from the Donetsk region.

Even sending produce to other towns within a small radius of Donetsk became difficult.

“The rebels have to approve your route if it goes through any of the checkpoints,” he says. He proposed a route from Donetsk to the nearby town of Makievka – just a short drive away – and is still awaiting a response.

Then Ukrainian troops began exchanging fire with the insurgents, a stone’s throw from his greenhouses. His terrified workers stayed away. “Two-thirds of the harvest was ruined because there was no one there to water the plants,” he says.

Mr Kolesnikov says Mir is just one of many Donetsk businesses damaged by the conflict. All of them will struggle to survive. “The region’s economy is at a standstill,” he says. “Small businesses are dying.”